Pay-Price Guidelines
Structuring A Note To Get The Highest Quote
When a car note is rejected or receives a low quote, it’s usually because the note was poorly structured in the beginning or the vehicle has an equity ratio below 45%.
When structuring a note, the Dealer should follow these guidelines:
Be sure you understand that when creating a note, the LONGER the original term the less value you will get when you sell your note.
Maximize the customer’s payments - without causing them to default
If you have to change something to make it work - lower the interest - NOT longer payments - OR more pick ups and dips (bigger down payment) OR lower the price of the car.
For the BEST pricing - not longer than 15 months - regardless of payment or interest.
To maximize your pay price, do the following at origination:
1. Keep the gross balance under $6,000; lower balances yield higher cents/dollar prices.
2. Keep the term less than 24 months; lower terms yield higher pay prices.
Make sure the NADA left side trade-in value of the vehicle, including adds and deducts for mileage is at least 45% of the gross balance, higher averages yield higher prices.